Banks as a type of commercial organization, on the one hand, play a crucial role in the country's economy, and on the other hand, in the event of crisis trends, they can suffer more than others due to the corresponding negative factors. As a result of this, they can, in turn, become a burden for the national economy when overcoming the crisis. But it is within the power of the state to prevent this. Thus, the Central Bank of the Russian Federation decided to create a list of the most stable credit and financial organizations that are better than others protected from the effects of crises, and therefore can not only not become a burden on the budget, but also help to overcome the national economy from the difficult situation in which it is currently . What financial institutions are included in this list?
The essence of systemically important banks
Systemically important banks of Russia - what are these structures? This term refers to the largest credit institutions, which, due to the compliance with certain criteria, are characterized as having great importance for the state economy. Such indicators may include the amount of bank capitalization, the degree of presence in the regions, as well as key figures reflecting the general financial condition of the structure.
However, official criteria, at the level of legal acts, have not yet been adopted in the Russian Federation. Therefore, one or another list of systemically important banks - such as, for example, the Central Bank of the Russian Federation published in July 2015, is formed mainly on the basis of internal mechanisms for evaluating the regulator. Lists of relevant institutions can also be compiled, for example, by analytical agencies such as RIA Rating.
The interests of the authorities
However, there is evidence that the criteria for classifying banks as systemically significant in the foreseeable future can be fixed at the legislative level. This issue, as analysts say, is being worked out at various levels of consultations in the financial market of the Russian Federation. Banks of Russia, classified as systemically important - if we talk about the lists published by the Central Bank, can rely on government support in case of crises - for example, if they have problems with liquidity. Thus, the authorities may be interested in maintaining the stability of financial institutions due to the fact that they, in turn, contribute to ensuring the stability of the country's economy as a whole.
The regulator informs
It can be noted that in 2013 the Central Bank of the Russian Federation published an interesting document - a draft instruction, in which the criteria for classifying banks as systemically important were fixed. This source said that the list of systemically important banks in Russia can be formed on the basis of the size of the assets of institutions, the share of deposits, as well as the amount of funds that were attracted from other financial organizations. The relevant recommendations were based on the criteria of the Basel Committee on Banking Supervision, as well as the advice of foreign experts. Moreover, financial indicators should be evaluated by the Central Bank, as follows from the provisions of the project, based on the results of the institution’s activities for 3 years.
It is also known that in January 2014 the Central Bank of the Russian Federation issued an instruction, based on the provisions of which it was supposed to determine a list of systemically important banks. The year 2014, as some experts suggested, should have been taken into account in the aspect of evaluating indicators - therefore, the corresponding list was not published during it. However, there was an opposite point of view. Some experts suggested that the year in which the Central Bank publishes the first list of systemically important banks, 2014 will be one way or another due to crisis trends and the need to determine the list of the most stable credit organizations. However, the Central Bank formed an appropriate list of financial institutions only in July 2015.
Systemically significant banks according to the Central Bank
Let us consider, therefore, what systemically important banks are currently allocating by the Central Bank. The list includes 10 large Russian financial institutions.
Namely:
- Sberbank - the largest bank in the Russian Federation;
- VTB - the second largest bank in terms of assets of the Russian Federation;
- Russian Agricultural Bank;
- Raiffeisenbank;
- UniCredit;
- Gazprombank;
- FC "Discovery";
- Rosbank;
- Promsvyazbank;
- Alfa Bank.
How do experts evaluate this list? Market analysts believe that the list presented by the Central Bank and including systemically significant banks is, in general, logical. Many experts, in principle, even before the regulator compiled this list, suggested that the listed financial institutions would be included in it. If only because these institutions are the largest in Russia in terms of assets. In total, they accumulate about 60% of Russian banking capital.
Criteria from the Central Bank
It is expected that the Central Bank in the foreseeable future will publish the criteria on the basis of which systemically important banks were determined, the list of which we examined above. This, in particular, was stated by representatives of the regulator in an interview with the media. It may be noted that some of the criteria are available to the public right now - if you examine the information from the press releases of the Central Bank of the Russian Federation. So, in one of them it is said that from October 1, 2015, when determining systemically important banks, an indicator reflecting the values for short-term liquidity will be taken into account. In this case, the requirements for its value will gradually increase. Initially, an indicator of 60% will be acceptable, but already in 2019 it will have to be 100%.
It is also known that from 2016 the Central Bank will establish requirements for capital buffers - also in accordance with the criteria defined by the Basel Recommendations. The corresponding indicator as an addition to the basic capital necessary to compensate for losses in the event of a crisis will have to be 0.625% relative to assets that are weighted by risk. Every year, the criterion will become more stringent. By 2019, banks will have to provide a capital buffer of 2.5%.
Optimal Representativeness
It can be noted that even in the directive by which it was supposed to determine systemically important banks in Russia in 2014, it was said that in total, credit and financial organizations included in the list should include at least 80% of the assets of the Russian banking market.
In this regard, some experts suggested that about 50 organizations will be in the first list of systemically important institutions. Moreover, in a media interview in the fall of 2014, representatives of the Central Bank of the Russian Federation reported that 19 banks should receive the corresponding status, accumulating, in turn, 70% of the capital in the national market.
Approaches to the assessment of systemically important banks
So, we studied some criteria by which systemically important banks are determined. The list of these organizations compiled by the Central Bank, we also reviewed. What do representatives of financial institutions and market analysts say about the appropriateness of forming an appropriate list and principles for its preparation?
So, the point of view is widespread that the status of a systemically important bank is not so much a preference as an increased responsibility. The credit and financial institution that received it must be ready to fulfill obligations - both related to solving the domestic economic problems of the state, and with participation in international communications. Representatives of the Central Bank emphasize that banks that are on the list of systemically important should not unconditionally rely on financial support from the state. The main role in helping to resolve possible problems arising in the institution, as noted by senior managers of the Central Bank, should play shareholders.
Criteria for classifying banks as systemic: expert estimates
What do experts say about the currently published criteria for the Central Bank, according to which banks can be classified as systemically important? Thus, analysts very positively assess the initiative of the Central Bank in terms of requirements for capital buffers. At the same time, many experts are interested in, based on what considerations, the Central Bank established the indicators noted above.
According to some analysts, the quality of governance should be a significant criterion in assessing the sustainability of Russian financial institutions. If the bank is headed by competent managers, then in any case it increases its chances of successfully overcoming crises, as well as performing those functions that are significant for the country's economy, experts say.
Catch up with the leaders
Russian banks, which are included in the list of systemically important securities by the Central Bank, are also called upon to be a model for other, possibly competing financial organizations, analysts say.
In principle, their credibility in the eyes of other participants in the credit market of the Russian Federation is not in doubt, experts say, but for smaller organizations it would be nice to be able to see, due to which specifically large banks are successfully developing and are positively assessed by the regulator. In this regard, the publication by the Central Bank of a full list of criteria for classifying credit and financial organizations as systemic may be a significant incentive to increase the efficiency of the national banking system as a whole, analysts say.